KPS Capital Partners, through a newly formed affiliate, entered into an asset purchase agreement with Briggs & Stratton and certain of its wholly-owned subsidiaries under which KPS will acquire substantially all of the assets of Briggs & Stratton, including equity of foreign subsidiaries, for approximately $550 million.
KPS Capital Partners, through a newly formed affiliate, entered into an asset purchase agreement with Briggs & Stratton and certain of its wholly-owned subsidiaries under which KPS will acquire substantially all of the assets of Briggs & Stratton, including equity of foreign subsidiaries, for approximately $550 million.
Briggs & Stratton filed a motion with the United States Bankruptcy Court for the Eastern District of Missouri seeking the designation of KPS as the stalking horse bidder in a sale motion as part of Briggs & Stratton’s filing of voluntary petitions under Chapter 11 of the Bankruptcy Code. Briggs & Stratton expects to sell its assets through a court-supervised sale process under Section 363 of the Bankruptcy Code.
KPS, through an affiliate, also agreed to invest $265 million in a FILO tranche of Briggs & Stratton’s debtor-in-possession financing to support its operations. Upon the entry of a final order approving the DIP facility, KPS will have the right to “credit bid” its $265 million participation in the DIP financing in connection with the proposed acquisition of Briggs & Stratton. Following court approval, the DIP facility will ensure that Briggs & Stratton has sufficient liquidity to continue normal operations and continue to meet its financial obligations during the Chapter 11 process, including the timely payment of employee wages and benefits, continued servicing of customer orders and shipments, and other obligations.
KPS also entered into an agreement in principle with the United Steelworkers of America (USW) with respect to a new collective bargaining agreement (CBA) for Briggs & Stratton’s hourly employees represented by the union at the company’s manufacturing facilities in Wisconsin. The new CBA, an exclusive agreement between KPS and the USW, will become effective upon completion of the acquisition.
Further, Wells Fargo agreed to continue to provide floorplan financing to support Briggs & Stratton’s customers under KPS’ ownership, and a syndicate of banks including Wells Fargo, Bank of America, BMO Harris Bank and PNC Business Credit committed to provide exit financing to Briggs & Stratton. The financings are subject to completion of the acquisition and customary closing conditions.
“We are very excited to acquire Briggs & Stratton, a legendary brand in American manufacturing and the leading company in its industry. Briggs & Stratton enjoys a leading market position, scale, a global manufacturing footprint, world-class design and engineering capabilities, and a portfolio of industry-leading products sold under iconic brand names,” Michael Psaros, co-founder and co-managing partner of KPS, said. “We intend to capitalize on the company’s many attractive growth opportunities and to support its already substantial investment in research and development, technology and new product development. KPS intends to grow the new Briggs & Stratton aggressively through strategic acquisitions.
“KPS is committed to the expeditious acquisition of Briggs & Stratton to provide certainty of outcome and confidence in the new company’s future for all of its stakeholders, including customers, employees and suppliers. The company and its stakeholders will benefit from KPS’ demonstrated commitment to manufacturing excellence, continuous improvement, global network, access to capital and significant financial resources. The new Briggs & Stratton will be conservatively capitalized and not encumbered by its predecessor’s significant liabilities.
“We thank the United Steelworkers of America for its support of our acquisition of the company. We have expended an enormous amount of effort, resources and capital on this process to date. We are confident that all of the conditions necessary to create a new thriving going concern enterprise are in place.”
Kirkland & Ellis is acting as legal counsel to KPS with respect to the transaction.
Briggs & Stratton, headquartered in Milwaukee, is a producer of gasoline engines for outdoor power equipment.
KPS, through its affiliated management entities, is the manager of the KPS Special Situations Funds, a family of investment funds with more than $11.4 billion of assets under management as of March 31, 2020.
